US securities regulator shopping for a smart contract analysis tool

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The U.S Securities and Exchange Commission (SEC) is seeking to procure a blockchain forensics tool that will enable it to monitor and analyze smart contracts. The tool will allow the watchdog to improve compliance and play a big role in the formulation of digital assets regulation.

In its solicitation request, the SEC revealed that the DLT smart contract analysis tool will detail and analyze code within blockchain and other distributed ledger technologies. The tool will support the regulator in its effort to “monitor risk, improve compliance, and inform Commission policy with regard to digital assets.”

Interested companies have until August 13 to apply. The successful applicant will be selected depending on his price and his technical ability to meet the requirements, with the contract running for 12 months, with the option for a renewal.

The forensics tool must be able to analyze aspects that are of interest to the regulator, including the smart contract purpose, the token sale specifications and the purchase and sale restrictions. It must also identify permission management, whitelisted digital assets addresses and any contract modifications performed via an admin key.

The regulator requires the tool to be accessible from any SEC office in the U.S. as well as from remote locations. For security, the tool shall employ transport layer security (TLS) encryption between the client instance and the vendor’s system. Additionally, it must not monitor or save activity details from the users.

Other stipulations include the provider’s willingness to cooperate with any risk analysis the SEC deems necessary. This includes undergoing an independent audit at least once every three years and subjecting its employees to mandatory security training before they can handle SEC data.

The SEC becomes the latest U.S. authority showing interest in blockchain analysis. Two weeks ago, the Internal Revenue Service signed on to use Coinbase Analytics. The tax agency signed a one-year deal with the exchange worth over $120,000.

Just days prior, the U.S. Secret Service signed a similar deal with Coinbase, paying $183,000 to use the exchange’s analytics tool for four years.